Nobel economist dismantles Trump’s 'pretty wild' scheme to buck Supreme Court ruling

President Donald Trump is trying a new way to obtain his desired tariffs on imports after the Supreme Court knocked down his first attempt.

This time, says Paul Krugman in his Substack column, the play is to invoke a clause in the Trade Act of 1974, which is designed to address unfair foreign practices affecting U.S. commerce.

Section 301 responds to “unjustifiable, unreasonable or discriminatory foreign government practices that burden or restrict U.S. commerce.”

What the Trump administration appears to see in that language is a way to get its tariffs by using it against other countries engaging in forced labor. The plan right now is to use it against 60 trading partners, including the European Union, which has its own laws against forced labor.

“The U.S. has longstanding sanctions against some Chinese exports because ... you know, they do do forced labor,”Krugman notes.

But by using the 301 plan against others like the EU, the Trump administration is stretching.

“That's a pretty wild thing to be doing,” Krugman says of any EU sanctions. “And it may seem uncharacteristic. Do you believe that the Trump administration is deeply concerned about forced labor? Yeah, well, if you believe that, I've got some shoes that don't fit to sell you.”

It’s transparently an excuse to reinstate the tariffs, Krugman writes.

“What makes it especially galling is that, if anything, we know that significant figures in the Trump administration are just fine with forced labor. Pete Hegseth likes a pastor who is on record as saying that he thought that slavery in the South before the Civil War was a good thing.”

The administration can’t impose Section 301 by fiat. They have to have an investigation and then a hearing, which they’re rushing to do by the end of April.

“It's all nonsense,” Krugman concludes. “And aside from it being bad economic policy, it's really corrosive. What we're saying is that laws are not serious. They're just to be used to drum up excuses to do what the president wants to do. And that's part of the broader picture. I like to say that tariffs are a different issue from the war, but at some level, it's all the same thing. And if you aren't feeling very concerned about where we're going with all this, then you aren't paying attention.